Fraud Unit: Ads for questionable products

The Better Business Bureau of Southern Arizona is giving warnings about a some product advertisement they feel could be misleading.

An Ohio company that markets products ranging from portable electric heaters to dietary aids to uncut sheets of U.S. dollar bills is under scrutiny for what the Better Business Bureau (BBB) calls "significant and ongoing concerns" over advertisements http://stlouis.bbb.org/Storage/142/Documents/ArthurMiddletonAds.PDF which the BBB believes have the capacity to mislead consumers.

The company, Arthur Middleton Capital Holdings of Canton, Ohio, is best known for its full-page ads in newspapers and magazines that appear similar to news stories and which run in publications in Missouri, Illinois and nationwide.

Arthur Middleton's owner and chairman is Rodney Napier.

Michelle Corey, BBB president and CEO, said the BBB has questioned Middleton's continued use of misleading and, at times, erroneous information in company ads.

"In our judgment, these problems have become so chronic and so flagrant that we felt an obligation to alert the public," Corey said. "Time after time, the BBB has expressed its concerns about the ads to the company. Time after time, the company has promised to make changes, only to come up with new products and new ads that are just as troubling."

The BBB has logged 207 consumer complaints involving World Reserve Monetary Exchange, 258 involving Heat Surge and 27 involving PatentHEALTH. Many of the complainants said the ads were misleading.

World Reserve Monetary Exchange sells coins, paper currency, safes and related items and describes itself as "the largest provider of coin and currency aside from the U.S. Federal Reserve." Heat Surge is best known as the seller of Roll-N-Glow electric fireplaces, with Amish-built mantles. PatentHealth sells non-prescription health aids marketed to assist in weight loss or help alleviate joint problems.

Among recent ads targeted by the BBB are:

World Reserve Monetary Exchange ads for uncut sheets of $1, $2 and $5 bills. The $1 and $5 bill ads have run in recent weeks in publications in the St. Louis area and elsewhere. The BBB considers the ads confusing and highly misleading. In December, the BBB alerted the public to World Reserve ads for "absolutely free" $2 bills, noting that the only way to get those four "free" $2 bills was to buy 12 additional bills at a cost of nearly $160.

A World Reserve Monetary Exchange ad for armored safes that ran this summer in newspapers and magazines. The BBB considers those ads exaggerated and misleading and noted that two testimonials - one by a man who turned out to be a company official and a second by the brother of Arthur Middleton's owner - may have violated Federal Trade Commission truth-in-advertising guidelines by not revealing their ties to the company.

A Heat Surge ad that has run in recent weeks in various publications around the country and which claims to be a "revolutionary breakthrough in home heat technology" that "practically eliminates high heat bills." The ad imposes a 48-hour deadline for ordering, saying "if you miss the deadline, you'll be turned away and forced to wait for future announcements." The ads do not disclose that the company's heaters are available at about the same price online or through department store retailers.

A PatentHEALTH ad for a joint health pill called Trigosamine Fast Acting published in the St. Louis area and elsewhere. The ad praises the over-the-counter product as "remarkable" and "incredible," but notes in a fine print disclaimer that the statements have not been evaluated by the Food and Drug Administration, and the product is not intended to diagnose or treat any disease. In March, the National Advertising Division of the Council of Better Business Bureaus referred a PatentHEALTH ad for Trigosamine Fast Acting to the Federal Trade Commission for possible enforcement action. That recommendation followed PatentHEALTH's failure to modify claims in an earlier ad.

The recent ads for sheets of uncut $1 and $5 bills contain what appear to the BBB to be several misleading statements. Each of the ads strongly suggests that the bills will increase in value when, in fact, there is little likelihood of that.

"Just think what they could be worth some day," the ads say. "Rare uncut sheets of real Gov't issued currency have sold at prestigious auction houses for thousands of dollars." The ads also claim that the offer is limited to a specific geographic area when that is not the case.

"Residents whose zip code is not on the distribution list can't have our Vault Stacks of these full uncut sheets of $1 bills," one ad says. The $1 bill ads quote a company official identified as Jefferson Marshall as saying that callers will be able to buy the uncut sheets of bills "for just face value." That is not the case.

In August, the BBB notified Arthur Middleton about concerns over what appeared to be misleading information in its armored safe ads. Those ads contained a warning that a toll-free hotline to obtain one of the safes would close within 36 hours, giving consumers a false sense of urgency. A BBB investigator called the hotline number three days after the deadline and found the line still active and a company representative eager to sell him a safe. The only difference was that the buyer would no longer get free shipping.

Monica Wallace, an attorney for World Reserve Monetary Exchange, said company officials acknowledge concerns regarding the testimonials of the company employee and Napier's brother and promised to make changes in future ads. She also said a proclamation that the bag of coins is "like winning the lottery" is intended as a "gross overstatement" since it is "mere puffery and not likely to be interpreted literally."

BBB St. Louis met on Oct. 10 with John Armstrong, senior vice president and general counsel for Arthur Middleton regarding its advertising claims. Armstrong said the company will continue to monitor its advertising for potential problems and asked that BBB concerns continue to be brought to the attention of the company.